Motsepe’s ARC bulks up investment in TymeBank

Digital retail bank TymeBank continued to acquire new customers in the second half of 2020, onboarding 2.66 million customers at the end of December 2020, with approximately 50% of customers actively using their accounts.

This is according to the financial report of Patrice Motsepe’s African Rainbow Capital Investments (ARC) for the six months ended December 2020. That number subsequently grew to 2.8 million customers by the end of February, and is expected to reach a milestone of 3 million customers by the end of March 2021.

It anticipates further growth following an agreement with the Zionist Christian Church (ZCC) in February 2020 to onboard a large proportion of the ZCC’s 9 million member base. This initiative has largely been postponed due to the impact of the Covid-19 pandemic and the National Lockdown and will only gain momentum once Covid-19 preventative measures are relaxed.

The bank celebrated its second anniversary last month, having officially launched on 26 February 2019.

 To ensure its continued growth, ARC Financial Services injected an additional R505 million into TymeBank during the reporting period as part of the scheduled capital requirements for the bank.

At 31 December 2020, the ARC Fund had an effective ownership interest of 36% in TymeBank, being its 49.9% of the 73.7% interest that ARC Financial Services holds in TymeBank. The ARC Fund’s effective capital contribution to TymeBank was R252 million for the six-month period.

TymeBank and Tyme Global also secured additional equity funding of $110 million from ARC Financial Services and two new shareholders, Apis Growth Fund II and JG Summit Holdings, post the reporting period.

It will be contributed in two tranches. The first tranche of $80 million will flow post signing of the agreements and is subject to regulatory approval. Following the conclusion of tranche one, ARC Financial Services will hold approximately 59% interest in TymeBank.

The ARC Fund’s effective capital contribution to TymeBank amounted to R252 million during the reporting period.

The progress to date, combined with the additional capital that has been injected up to 31 December 2020, results in a fair value of R2.36 billion in ARC Financial Services at 31 December 2020 (30 June 2020: R1.86 billion).

The ARC Funds indirect investment in TymeBank therefore totals R1.18 billion at 31 December 2020, up from  R927 million in the prior reporting period.

TymeBank now represents 9.2% of ARC’s fund value, up from 8.3% at the end of June 2020.

Looking ahead, ARC said: “It does appear as if some of the shock and uncertainty resulting from the pandemic has started to abate and many companies have adjusted to the new conditions. Market sentiment and activity in certain sectors have also seen improvement, especially with the prospect of some effective vaccines becoming available.”


Read: TymeBank gets R1.6 billion in foreign investment as it nears 3 million customers

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Motsepe’s ARC bulks up investment in TymeBank